Would You Trust the Government to Do Your Tax Returns?
Maybe, But Not Likely.

Which is why it's good news that in California, the Franchise Tax Board may shelve its fledgling NetFile program at the request of the tax software industry.

The software makers are understandably concerned by competition from the government. But just as as valid, I think, is the system of checks and balances built into a sytem of an educated citizen taxpayer and the power of government.

Calfornia's NetFile would provide a direct link to the Franchise Tax Board. State officials said that although the program offers few of the bells and whistles of privately produced products, it allows many people to file directly with the state, according to the LA Times. But the program excludes taxpayers earning more than $265,000 and anyone with certain types of income or deductions. As a result, about 8 million taxpayers cannot use NetFile.

Still, state tax officials have suspended work on software that would allow every taxpayer to file directly. The software firms want the state to provide free electronic filing only through partnerships with private industry, similar to an approach used by the federal government.

But don't exhale yet. The state has only called for a two-year moratorium on NetFile.